FCC Loses on Appeal
Colin Dixon, Senior Partner, Advisory
April 6, 2010
The US Court of Appeals in DC today ruled in favor of Comcast’s assertion that the FCC lacks authority to enforce rules relating to Net Neutrality. The particular case in question was Comcast’s “network management” practices in controlling peer-to-peer activities of users of its broadband network. The FCC told Comcast that they couldn’t discriminate against a particular application in this way and Comcast found other ways to achieve their management goals.
However, Comcast challenged the right of the FCC to regulate the provisioning of Internet service in this way. Today, the US Court of Appeals ruled on that challenge.
In the court’s written opinion the judges said that the FCC’s authority to regulate the provisioning of Internet service had to meet two tests:
“The Commission . . . may exercise ancillary jurisdiction only when two conditions are satisfied: (1) the Commission’s general jurisdictional grant under Title I [of the Communications Act] covers the regulated subject and (2) the regulations are reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.”
The Appeals Court didn’t really look at whether Internet service was part of the FCC’s mandate since Comcast agrees that the service is “interstate and foreign communication by wire.” So, by Comcast’s own admission FCC regulation of Internet service passes test one.
According to the court, however, it is on the second test the FCC fails. The judges said the FCC failed to prove that they had the right to enforce the rule to stop Comcast discriminating against peer-to-peer traffic.
So, in effect the court said that Internet service is something the FCC has a mandate to regulate but that it can’t write and enforce any rules to do so.
Of course both sides of the net neutrality debate pounced on the ruling. Barbara Esbin, Senior Fellow at The Progress and Freedom Foundation, said:
“FCC's action against Comcast's Internet network management practices was unlawful because Congress has not delegated to the FCC regulatory authority over the provision of Internet services.”
This seems a little odd since the judges didn’t say the FCC lacked the authority to regulate Internet service at all. They just said they can’t enforce any rules on the service.
On the other side of the argument, S. Derek Turner, research director for Free Press, said:
“This cannot be an acceptable outcome for the American public and requires immediate FCC action to re-establish legal authority.”
Since the court said the FCC can’t write and enforce rules for Internet service I’m not quite sure how the FCC can re-establish their authority to do this without Congress’ help.
So, where does this leave us, the consumers of Internet services? In the short term, all the services we’ve grown to use and trust on our broadband connections will continue to function as they do today. Whether you’re streaming Netflix movies to your new iPad or downloading movies from Amazon Unbox to your TiVo, these services will continue to work as they do today. After all, part of the reason we buy broadband in the first place is to get at all the video on the Internet.
However, as operators begin to deliver video services –such as Comcast’s Fancast Xfinity - on their broadband networks Internet service providers need to know that the broadband playing field will remain even. Can they really trust Internet service providers to not prefer their own broadband services when exercising “network management” to relieve congestion?
One thing for the future that does seem certain is new legislation from Congress in this area. And on that issue I’ll let Barbara Esbin have the last word:
“…the time has come for our elected representatives to take up the question of whether and how the FCC should regulate the provision of Internet services.”
To view the slides or recording of our recent Net Neutrality webinar, please click here.
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